From a small company established in the 1880s to an American multinational corporation, that's a household name. Here’s how Johnson & Johnson grew over the years.
You are bound to have come across the familiar Johnson & Johnson logo on some of your favorite products in the past, haven’t you? Look around, maybe you are using some of them right now, too.
A small company established in the 1880s, Johnson & Johnson is now an American multinational corporation developing pharmaceuticals, medical equipment, and a range of consumer goods.
The company today stands amongst the world’s leading corporations and shows no sign of stopping.
To help you get an idea of Johnson & Johnson’s current status, here are a few statistics:
Johnson & Johnson’s story is about a small start-up that revolutionized the healthcare industry for good. Let’s take a trip through the glorious history of one of the most renowned corporations in the world…
Johnson & Johnson’s journey begins with the story of the man who laid the foundations for the global corporation back in the 1800s - Robert Wood Johnson.
While Wood Johnson, an American industrialist, was the foremost figure in the company’s founding, his brothers played an integral role too.
In 1861, the American Civil War prompted 16-year-old Robert Wood Johnson to develop an interest in healthcare. Therefore, his mother arranged for him an apprenticeship at her family’s apothecary - Wood & Tittamer.
The apprenticeship marked the beginning of his professional training in the field of healthcare. One of the benefits gained from this period of learning was his knowledge of mixing medicated plasters that gave him a solid foundation for setting up his own career.
In 1864, Johnson left to work as a salesman of drug products for Roushton & Aspinwall. It was here that Johnson met George J. Seabury - a chemist and pharmacist. He struck up an understanding with Seabury, and the two decided to start their own business in 1873 under the name of Seabury & Johnson.
The New-York based company became known for its medicated plasters and soon garnered a respectable reputation amongst the world’s recognized medicated plaster brands.
The Civil War had claimed more than 720,000 lives, and many of them died of infection and disease. Doctors sought to contain the spread of infection by performing swift limb amputations.
However, infections continued to spread as the surgeons performed these operations without washing hands or cleaning their tools after treating one patient and before treating the next one.
Within this context, Robert Wood Johnson visited the 1876 Centennial Exposition in Philadelphia to represent his company. The World's Fair hosted the International Medical Congress, where Dr. Joseph Lister introduced antiseptic surgery.
The idea was radical for its time, and many were skeptical of its merits. Demonstrating a keen sense of foresight, Johnson recognized Lister’s idea as the key to the future of medicine. However, Lister’s proposed method for sterilization was impractical (he suggested spraying the operating room with carbolic acid). Consequently, Johnson dedicated his efforts to inventing sterile surgical equipment.
By 1878, the effort proved fruitful, and the company’s monthly earnings reached $10,000 as a result.
In 1885, Johnson left Seabury & Johnson due to a disagreement between the two partners over the distribution of company profits. Johnson, instead, joined with his two brothers James Wood Johnson and Edward Mead Johnson, to begin a small family business called Johnson & Johnson in 1886.
L to R: Robert Wood Johnson, James Wood Johnson, Edward Mead Johnson Source
At the time of its establishment, Johnson & Johnson merely had 14 employees, with eight women and six men. Within the new venture, Johnson assumed management of the company in exchange for half of its shares, while his brothers took 30%. Thereafter, Johnson became the first president of the company.
However, all three brought their own strengths to the table:
The company was well-equipped for growth due to the formidable three-way partnership between the Johnson brothers.
Robert Wood Johnson possessed the ability to recognize opportunities when they presented themselves to him. His acceptance of Dr. Lister’s idea of antiseptic surgery was proof of this ability.
Where others saw risk and were skeptical, Johnson latched onto the idea and set about trying to find ways of improving it. He wasn’t just content with having solutions handed to him; instead, he strived to discover better alternatives.
This attitude led to the development of sterilized surgical equipment that ultimately brought tremendous profits for the company.
Johnson & Johnson adopted a pioneering approach; it used novel production processes to manufacture improved products. The company also successfully attracted talented people who helped Johnson & Johnson in its initial years of growth.
Even the earliest Johnson & Johnson products were of exceptional quality as they were developed to improve existing product designs and practices. The company’s first product improvement was Medicinal Plaster - a way for people to apply a treatment directly onto the affected area of the body.
Johnson & Johnson’s medicinal plasters used medical compounds mixed in an adhesive. It also designed a soft, absorbent cotton and gauze dressing. However, the development of a new product was not enough. James Wood Johnson used his expertise in engineering to develop machinery that could manufacture such plasters.
Thus, the plasters and dressings were mass-produced and shipped across the country. They even began sterilizing the bandages with dry heat by 1890. Ready-made dressings brought about a drastic decrease in infection rates and saved countless lives, putting Johnson & Johnson on the map!
Soon after the founding of Johnson & Johnson in 1887, Robert Wood Johnson met Dr. Frederick Barnett Kilmer, and the two soon developed a lasting friendship.
Dr. Kilmer originally had a career as a retail pharmacist, but he began taking a keen interest in Johnson & Johnson, eventually joining as an employee in 1888. Kilmer was passionate about promoting antiseptic wound care and sterilization methods which aligned him with Johnson & Johnson’s vision.
As part of the company, Kilmer produced countless influential articles and publications, one of which was “Modern Methods of Antiseptic Wound Treatment.” This was a medical guide on performing sterile surgery using the company's products. The company distributed Eighty-five thousand copies of this guide to doctors all over the U.S.
Kilmer also established the Johnson & Johnson Aseptic Department; he introduced the concept of “clean rooms” to manufacture sterile surgical dressings and sutures.
Kilmer was Johnson & Johnson’s first scientific director and headed the company’s research activities. His contributions to Johnson & Johnson were invaluable and helped the company form a solid foundation for future growth.
In 1891, Johnson & Johnson set up a bacteriological laboratory which boosted research and helped the company meet the accepted requirements for sterile products. It introduced dry heat, steam, and pressure throughout the manufacturing process, which guaranteed the sterility of its bandages.
On the contrary, in 1890, Kilmer received a letter from a colleague complaining about how medical plasters were causing skin irritation for patients. Kilmer sent him a tin of Italian talc, which was successful in easing the irritation, and marked the beginning of the famous powder product – a staple in baby products.
Johnson & Johnson began including containers of talc with its plasters. The talc was also helpful in soothing diaper rash, which prompted the company to launch Johnson’s Baby Powder in 1893.
Nevertheless, the company continued to improve its adhesive bandages, and in 1899, it introduced a zinc-oxide-based adhesive plaster. The plaster did not cause skin irritation and was generally a better alternative to the previous design.
One of Johnson & Johnson's more significant contributions was the introduction of maternity kits in 1894. These kits were meant to aid in childbirth at home and contained antiseptic soap, sanitary napkins, umbilical tape, and Johnson's Baby Powder.
Kilmer also wrote “Hygiene in Maternity,” an instruction manual for mothers before and after delivery. Following the Spanish - American War, Johnson & Johnson donated 300,000 packages of compressed surgical dressings for soldiers in the field. It also created a trauma stretcher for field medics.
The key to Johnson & Johnson's early success was recognizing the need to improve existing medical products and procedures continually.
Not only did the company focus on improving product design and production processes, but it also produced publications to create awareness about the new medical products and practices that it was developing.
The two-fold strategy of improvement and awareness proved to be incredibly profitable for the company. But most importantly, it ushered in an era of safer and enhanced medical practices that saved countless lives.
In 1910, Robert Wood Johnson died, and the company’s leadership was passed onto his brother James Wood Johnson.
James had already proven himself to be a great engineer, and the company had benefitted immensely from the machinery he had helped develop.
He proved to be equally competent in the role of chairman till 1932.
Soon after the company changed leadership, World War I broke out, causing the demand for sterile surgical instruments to rise dramatically. As a result, the company had to increase its production levels to meet the demand.
The increased production inevitably caused an increase in the company’s need for textile materials. Therefore, to meet demand, Johnson & Johnson acquired Chicopee Manufacturing Company in 1916.
Towards the end of the war, the 1918 flu pandemic also broke out, in response to which Johnson & Johnson invented and distributed epidemic masks to help curb the spread of the flu.
Johnson & Johnson opened its first international affiliate in Canada in 1919. The Gilmour Plant near Montreal became its first overseas factory. It produced surgical products for international customers.
In 1924, Johnson & Johnson opened its first overseas manufacturing facility in Slough, England.
In both overseas ventures, the company followed a decentralized approach which encouraged its operations to be more in tune with the local needs of patients and customers. In the 1930s, the company also expanded its operations to Argentina, Brazil, Mexico, and South Africa.
Despite the acquisition and expansion efforts, Johnson & Johnson’s true strength lay in developing new and improved products. In 1920, a Johnson & Johnson employee Earle Dickson invented the Band-Aid Brand Adhesive Bandages by combining two of the company’s products: gauze and adhesive tape.
This was the first commercial dressing for minor injuries that consumers could apply themselves. In 1921, the company also released Johnson’s Baby Soap adding to its gradually expanding line of baby products. Among the company’s list of notable products was the development of the first cheap, commonly available sanitary pad for menstruating women.
In 1931, Johnson & Johnson also introduced the first prescription contraceptive gel - Ortho Gynol. The company was producing a diverse range of products targeted towards doctors and consumers as well. It diversified its consumer goods under various categories like women and baby products, hygiene, and first aid.
Johnson & Johnson explored all avenues of growth instead of focusing on just one means of expansion. But by no means was the company unfocused in its vision. Its heavy emphasis on developing new and improved healthcare solutions kept its focus oriented while consolidating its business with acquisitions and expansion.
Johnson & Johnson did not restrict itself in the kind of products it was developing either; instead, it sought to diversify while sticking to its strengths and expertise.
Robert Wood Johnson II was the son and namesake of the company’s founder. He assumed leadership in 1932.
While one may think that the success of Johnson & Johnson had been remarkable until now, Johnson the II taking the reigns ushered in a new, never-before-seen, era of success for the company. In fact, he is remembered as the person who turned Johnson & Johnson from a family business into one of the world’s largest healthcare corporations.
Robert Johnson II had joined the company as a mill hand while he was still a teenager. This early employment gave him an insight into the workings of the company. In 1918, when Robert Johnson was 25 years old, he was appointed as the company’s vice-president.
He also developed an interest in politics, along with enhancing his business sense, and even served a term as mayor of Highland Park, New Jersey, from 1920 to 1922. In 1932, Robert Johnson was elected as the company president and became the chairman of Johnson & Johnson's board in 1938.
The man’s range of expertise and value as an individual becomes even more apparent because of his role in World War II.
Just as the previous war had brought in avenues of improvement for the company’s product portfolio, the second World War was no different. When the war broke out, Robert Johnson was tasked with identifying the required products for the war effort. This led to the creation of the duct tape used in sealing ammunition boxes.
The plant managers at Johnson & Johnson altered the existing cloth medical adhesive tape by adding a waterproof plastic layer with a more aggressive adhesive. The tape was colored to match the ammunition cans. Consequently, during the war, Johnson & Johnson became a major supplier of combat first aid kits and other such military supplies.
Robert Johnson had come to be known as “the General” as he had attained the rank of a brigadier general in WWII and had even served as vice chairman of the War Production Board.
Robert Johnson was inspired by his father’s championing of social issues and was inclined to continue the legacy of corporate social responsibility. He was vocal about his support for raising the minimum wage, improving work conditions in the factories, and enhancing the company’s overall attitude towards employee care.
Despite the Great Depression, Johnson & Johnson retained all its workers and even raised their wages by a whopping five percent! In 1933, Johnson even wrote to Franklin D. Roosevelt asking for federal legislation to increase the minimum wage and reduce work hours across American.
His dedication to the cause is reflected in a publication he wrote to encourage other businesses to look beyond profits and recognize their responsibility to consumers, employees, and society (“Try Reality: A Discussion of Hours, Wages, and The Industrial Future.") Robert Johnson encouraged the management to engage with workers respectfully. He also called for skill development programs to equip workers for success in modern industrial society.
Even when the second world war broke out and Johnson & Johnson employees were drafted and enlisted, the company ensured they would have a job when they returned home.
In 1943, Robert Johnson wrote the company's Credo that outlined its guiding philosophy, which is still carved into the wall of the company's headquarters in New Jersey. It states that the company's first responsibility is to "the doctors, nurses and patients, the mothers and all others who use our products." It sets out responsibilities to customers, suppliers, distributors, employees, communities, and stockholders. In 1944, the company's public listing on the New York Stock Exchange transformed Johnson & Johnson from a family-owned business into a public company.
In 1954, the company launched the Johnson’s Baby Shampoo with its NO MORE TEARS formula; a mild, soap-free shampoo designed so that the babies’ eyes are not irritated while washing.
The late 1950s saw Johnson & Johnson undertake a series of acquisitions that heavily contributed to the expansion of the business.
In 1959, the company acquired McNeil Laboratories, Inc., dedicated to developing prescription drugs such as Tylenol, the pain-relieving medicine. A year after the acquisition, the company was able to sell Tylenol as an over-the-counter drug. Tylenol eventually became the most recommended pain reliever by doctors and pediatricians.
In 1961, Johnson & Johnson bought Janssen Pharmaceuticals, a Belgian research and drug company founded by Dr. Paul Janssen - one of the century's most outstanding and innovative pharmaceutical researchers. Janssen Pharmaceuticals was also known for having made the major antipsychotic drug Haldol.
Robert Johnson was a blessing for the company as his approach to business and vision for the future helped the company grow exponentially.
Robert Johnson’s emphasis on taking care of employees and identifying the company’s areas of responsibility towards various stakeholders provided the business with an ethical grounding which is the true mark of a great enterprise.
Because of his leadership, the company's annual sales grew from $11 Million to $700 Million by 1968.
In 1963, Robert Johnson retired from the company but remained involved in its affairs. For the first time, the chairmanship of Johnson & Johnson went outside the Johnson family. James Burke, who had previously been affiliated with the marketing department of Procter & Gamble Company, played a vital role in this phase of the company's journey.
Towards the beginning of the 1960s, there was a considerable increase in federal regulation of the healthcare industry.
The company needed to find a way to balance out the decrease in earnings from a possible slowdown in the professional products division. Increasing profits from the Johnson & Johnson consumer product ranges could produce the desired effect.
Thus, when James Burke became the president of Johnson & Johnson's Domestic Operating Company in 1966, he set about devising a strategy for this purpose. Burke brought together marketing experts from Procter & Gamble to organize several highly successful advertising campaigns to highlight the Johnson & Johnson consumer products.
The first of these advertisements was a promotion of the Carefree and Stayfree sanitary napkins. This was a bold venture into the market for feminine hygiene products, which the Kimberly-Clark Corporation dominated.
Johnson & Johnson's advertising approach broke conventions by running its advertisements for Carefree and Stayfree on televisions. Previously, the promotion of feminine hygiene products was kept discreet and restricted to women's magazines.
Burke’s strategy helped Johnson & Johnson capture half of the feminine hygiene products market by 1973. It further expanded the products line by acquiring Dr. Carl Hahn G.m.b. H. - a German tampon manufacturing brand.
Since Johnson & Johnson’s acquisition of the firm that made Tylenol, the drug had been marketed as a high-priced product. Burke saw this situation as a challenge to overcome.
In 1975, an opportunity presented itself when Bristol-Myers Company launched Datril - a drug advertised as having the same ingredients as Tylenol but available at a considerably lower price.
Burke consulted with the chairman of the company and convinced him to tackle the competition by dropping the prices of Tylenol to Datril’s level. By doing so, Burke brought the drug into the mass-marketing arena by slashing its price.
The result of this dramatic price dropping was that Tylenol not only beat Datril but claimed the top spot as the best-selling pain reliever from Anacin!
In 1976, James Burke was appointed as CEO and chairman of the board.
Before he took charge, Johnson & Johnson had maintained a balance among its various divisions. It did not prioritize one over the other, and no single product took up more than 5% of the company's total sales.
However, with Burke's coming, this equilibrium was broken. The company began to pursue the promotion of its consumer products aggressively. Nevertheless, Burke did not neglect the company’s status as a leader in professional healthcare products.
Johnson & Johnson continued to acquire relevant businesses such as Extracorporeal Medical Specialties - a manufacturer of kidney dialysis and intravenous treatment products.
The company also consolidated its operations in eye care through the acquisition of Frontier Contact Lenses. Consequently, the company introduced its Acuvue brand of disposable contact lenses, which was highly popular across the U.S.
After Burke retired in 1989, Ralph S. Larsen became the CEO and chairman of Johnson & Johnson. The new leadership assumed control of a sprawling network of 168 companies spread across 53 countries.
Although a good policy for its time, the company’s decentralization had introduced many inefficiencies into the corporate structure. Therefore, it became apparent that an organizational restructuring was needed.
In 1989, the baby products division was merged with the health and dental units to form a broader consumer products segment. Over the next two years, Larsen also extended the reorganizing effort to Johnson & Johnson’s overseas units.
He reduced the number of professional operating departments in Europe to 18 from 28. This was achieved by consolidating them under three primary companies: Ethicon, Johnson & Johnson Medical, and Johnson & Johnson Professional Products.
This phase of Johnson & Johnson's journey signified the need for change when circumstances call for it.
Even though the company had avoided prioritizing one business division over the other when professional healthcare products came under stricter federal regulations, Burke expanded the business in the consumer products division.
When Larsen discovered that a decentralized approach was introducing inefficiencies, he restructured the company to eliminate this effect. The timely adjustments of the company’s strategies cleared its path for continued growth.
The following decades brought new challenges for the company as it tried to maintain its growth trajectory by initiating acquisitions and developing new products of its own. Recently, the company has been involved in tackling the challenges brought by the COVID-19 pandemic.
The 1990s saw a rise in healthcare costs which was the subject of much criticism. However, Johnson & Johnson was spared the brunt of the negativity due to its longstanding history of social responsibility.
Its efforts geared towards the care and wellness of its employees, such as childcare and family leave, were recognized for reducing costs and enhancing productivity. Moreover, the weighted average compound prices of Johnson & Johnson’s healthcare products grew more slowly than the U.S. consumer price index during that time.
Thus, the company was able to present itself as part of the solution to the healthcare crisis rather than a contributor.
The 1990s were not as conducive to growth as the previous decades due to the generally pessimistic economic situation. However, Johnson & Johnson experienced a slow but steady rise in revenues from 1990 to 1993.
The acquisitions in the mid-1990s significantly contributed towards rapidly rising revenues. The acquisition of Neutrogena Corporation (a renowned skin and hair products company that came highly recommended by dermatologists) in 1994 was a significant milestone for the company.
The acquisitions helped Ethicon Endo-Surgery (one of the company’s subsidiaries) to pioneer minimally invasive surgery.
In 1998, Johnson & Johnson made its largest acquisition by purchasing DePuy Inc. - a leader in orthopedic products - for $3.7 Billion in cash. The company was able to bolster its R&D efforts by merging with the biotechnology firm Centocor Inc. and becoming the world’s leading biotech corporation.
Soon after the merger, Remicade, a Centocor-developed drug, was approved by the FDA to treat Rheumatoid Arthritis.
Johnson & Johnson hit a rough patch at the beginning of 2000; it was forced to withdraw Propulsid - a prescription heartburn medication - from the market. The settlement of the controversy surrounding the drug incurred high costs for the company, both in loss of reputation and money.
In contrast, the company’s pharmaceutical business benefited significantly from the sales of certain drugs. But the earnings only lasted for the first few years, after which tough competition surfaced in the markets. By 2004, however, Johnson & Johnson ranked as the fourth-largest pharmaceutical company globally and ranked second amongst the biotech firms.
The 2010s saw the company continue its series of acquisitions, which helped develop new specializations besides consolidating existing business segments. In 2010, Johnson & Johnson acquired Crucell (a biotech firm specializing in vaccines and pharmaceutical technology) to form Janssen Vaccines.
2015 saw the company acquire Coherex, Medical Inc., expanding its range of treatment options for atrial fibrillation under its subsidiary - Biosense Webster. In 2019, Johnson & Johnson introduced photochromic contact lenses that adjust to sunlight and help the eyes recover faster from exposure to bright light. The lenses are the first to use an additive that adapts the amount of visible light filtered to the eyes.
The company was not unfamiliar with tackling pandemics since it had done so in the past. Following the coronavirus outbreak, Johnson & Johnson committed over $1 Billion towards developing a not-for-profit COVID-19 vaccine.
In June of 2021, the WHO issued interim recommendations for the use of the Janssen Ad26.COV2. S COVID-19 vaccine against COVID-19.
In January of 2020, abiding by its Credo, Johnson & Johnson had pledged $50 million to support doctors, nurses, midwives, community health workers, and others on the front lines fighting against COVID-19.
In collaboration with Prisma Health, Ethicon manufactured and distributed a device that allows a single ventilator to be fitted for use by two rescuable patients until individual ventilators are available. This was a significant contribution since the shortage of ventilators has caused countless deaths during the pandemic.
Consequently, Johnson & Johnson was successful in weathering the storm amid the pandemic. Its efforts to develop a COVID-19 vaccine, protect its employees, save costs, and sustain vital product supply despite considerable difficulties in the supply chain, remained unwavering.
The company went through many ups and downs within the last few decades, but it kept facing the challenges head-on and tried to overcome them by adapting its strategies accordingly.
When the company’s products were not doing as well as expected, or the returns were short-lived, it turned towards acquisitions as a way to cope.
At the same time, it continued to enhance its product development. Although not always successful, it did yield quite a few significant achievements, such as the photochromic contact lenses and the ventilator device.
Johnson & Johnson has been in business for more than a century. Its growth from a small start-up to an industry leader is quite inspiring.
Even today, the company keeps its sights set on greater heights as it continues to reinvent itself, one product at a time.
Investment in Acquisitions
Johnson & Johnson always strove for excellence across all areas of business, whether it be product design, production processes, or even advertisement strategies. The company focused on improving itself and continued to evolve through the years while maintaining competitiveness on a global scale. Its dedication to doing better did not just revolve around increasing profits but was rooted in improving the lives of patients and customers across the world which is evident from its ground-breaking products.
Even before Johnson & Johnson officially set out its Credo, its progress was driven by a sense of social responsibility. Despite going through extreme situations such as the Covid-19 pandemic, the Great Depression, and the World Wars, the company protected its workers and looked after their interests. Its business dealings were guided by a sense of responsibility towards its customers, employees, communities, and stockholders. This not only helped it gain the trust of customers but also motivated employees.
Johnson & Johnson was not afraid of changing its ways when the situation called for it. Sometimes it was even required to discard practices that had served well in the past to cope with changing market trends. It reorganized its corporate structure, made drastic changes to its advertising strategies and shifted its focus towards a particular business segment in response to a changing global economy. As a result, it maintained its relevance and competitiveness amidst changing trends.
Johnson & Johnson caters to an industry that needs new technologies and products. This is why the company continues to invest heavily in R&D. The development of innovative healthcare solutions and consumer products such as the Band-Aid and the No More Tears formula for baby shampoo among many others helped it achieve competitive advantage and remain a step ahead.
Johnson & Johnson expanded its business through multiple channels instead of restricting itself by focusing on just one strategy. It undertook mergers and acquisitions, diversified its portfolio, and established international offices and facilities to expand the scope of its business. It avoided putting all its eggs in one basket and instead adopted a multifaceted approach towards growth that helped the company survive uncertain market conditions and grow exponentially through thick and thin.
Johnson & Johnson did not shy away from taking calculated risks, which is why it was able to get ahead of its competition. The company accepted and even promoted the then-revolutionary idea of sterile surgery and even dropped the price of Tylenol drastically to make it more competitive in the market. Even its most extreme measures were not taken recklessly but had extensive planning and thought involved behind the decision.
Johnson & Johnson is a unique company that is always evolving. While we might not be sure what revolutionary product it will come up with next, but we can say with absolute certainty that come what may, the company will continue to set the bar higher and scale-up.